Netflix has made it clear that it wants to partner with more ‘traditional’ platform operators in EMEA, outlining the benefits that result from creating a ‘one-stop-shop’ where consumers can easily move between broadcast TV services and the SVOD app on the same set-top box, television or other device. Maria Ferreras, VP Business Development at Netflix, told an audience at OTTtv World Summit today that the digital giant would be a ‘BFF’ to platform owners – best friend forever.
Her company is interested in long-term partnerships and she emphasised the way that Netflix complements existing content line-ups on traditional platforms, rather than competes with them. This becomes increasingly true as the company invests more on exclusive originals – and its content spend will hit $7-8 billion (a year) next year, Ferreras pointed out.
The ex-Google executive suggested that Netflix was not interested in live sports or news and she dismissed any likelihood that the company would launch a linear channel. “We do things that can bring additional value to subscribers and ‘live’ is not something that others cannot do. We still believe in customised content,” she told the London audience.
When listing reasons why operators should partner with Netflix, Ferreras emphasised its determined focus on ‘entertainment’ and nothing else – “no live, or sport, or news”. She added: “That gives reassurance of what to expect when you partner with Netflix and why, when you partner with us, that becomes a good experience, as a best friend.”
However, she confirmed later that these words were not meant as a promise or guarantee that Netflix will stay away from sport or news, as part of the pitch to European operators. Business (in general) is too unpredictable to predict the future, she said.
Nevertheless, the current intent is quite clear: no live, no linear, no sport, no news – all of which may provide comfort to platform operators who are still deciding whether Netflix is a future friend or competitor. Most of the recent data from analyst/research firms points towards Netflix being additive rather than substitutional in Pay TV homes and as we reported previously, Ampere Analysis has forecast that while Amazon will become more of a ‘platform’, Netflix will become more of a premium ‘channel’.
Netflix wants to make it easier to access its service, leading to more subscribers and more time spent on the service. The Netflix ‘win’ is clear enough. And what do the platform operators gain? If you accept that Netflix is a channel (and Ferreras pointed out that the company is now one of the most important studios worldwide) then operators enhance their role as an aggregator of premium content if they onboard the service.
Ferreras noted that the SVOD service is building up its local content and has already invested $2 billion in European production. “We are trying to combine the best local content with global appeal. We are becoming much more sensitive to the local markets.”
Ferreras gave a list of partnership benefits, including the fact that Netflix is a recognised and loved brand with high satisfaction ratings and one-third of what IMDb data suggests is the ‘best content’ today. And consumers will not have to switch away from a platform operator device (e.g. a set-top box) if Netflix is present on it.
She added that Netflix is popular with young consumers and claimed they consider the service part of their daily lives. “This could be interesting for traditional brands if they are struggling to attract younger audiences.”
There are other benefits to partnering. “The service is addictive, in a good way. You can increase your revenues but it will not cost you anything. Our model is different to typical content providers. We sell the Netflix experience; we do not license the content. We do not ask for a huge minimum guarantee for our shows. The risk is minimal.”
Then there is the opportunity to become a one-stop-shop, of course. “There are lots of different OTT services and users have to go to many places, which is chaotic. There is a chance to create a place where someone can go, comfortably, to access [more of the] content. It would be really useful to go to one device or service that allows me to consume Netflix easily,” Ferreras said.
“You want to keep these people coming back ‘home’ to that device because it is easy to use. The ‘one-stop-shop’ wraps everything up.”
She concluded that this onboarding approach will give operators happy customers and also ensure that they become part of new and forming consumer habits.
Netflix also promised that its flexible approach to commercial deals means it can create a bespoke agreement that gives every operator a way to differentiate themselves in the market. In an example of some marketing cooperation, Ferreras played a Facebook advertisement that the French telco SFR has been using, featuring one of the stars from ‘Orange is the New Black’. The message was clear: Netflix helps its BFFs – in this case providing onscreen talent for the marketing initiative.
Ferreras noted the culture of continuous innovation at Netflix and suggested there will be product changes over time that will make it easier to find content on the platform. Returning to the theme of making Netflix more accessible, through onboarding deals but still within an SVOD setting, she said: “We do think we need to make the selection of programming on Netflix easier for people who find it annoying [to have to open a separate app] and just want to turn it on [from where they are already watching television]. We do want to make it easier [to access Netflix content].”